Bookkeeping is an essential part of maintaining and growing a business. Detailed records of financial transactions dating back to the first penny spent will allow you to have an accurate benchmark of your company’s revenue and make strategic decisions regarding future income. While you could handle this responsibility, outsourcing this job to a trained accountant often makes more sense.
Pros of Outsourced Bookkeeping
Hiring an accounting service to handle your books is often more cost-effective than hiring an in-house employee. There isn’t any overhead for you to cover — such as paid-time-off, health insurance, retirement, vacation and sick days, and workers’ comp.
While you may understand basic financing, it’s less likely for a trained professional to make mistakes that could end up costing you more in the long run. If you also need them to handle payroll and invoices, you can ensure your bills and employees are paid on time. This prevents late payments and fees and having workers quit out of frustration, resulting in time and money training new individuals.
Frees Up Time
Quality and accurate bookkeeping require multiple hours each week. As the business owner, there’s already a lot on your plate, and taking time away from the core function of your growing company can be difficult. Outsourcing this work allows you to spend more of your day on how products and services can be improved and to focus on building relationships with prospective clients and customers.
Offers More Accurate Reporting
Accountants do more than enter data, they also evaluate receiving and payable trends, look for issues in expenditures and cash flow, and offer advice for growing income. With their help, you’ll always have advanced notice of potential lulls or growth periods in the market. You will also be kept informed of any strange spending, which will allow you to have more control over internal affairs without directly overseeing all financial aspects of the business.
Cons of Outsourced Bookkeeping
When you use an outside service, there’s always the potential for paying more for the same work as time goes on. Sometimes, this is because the business changed, but it can also result from hidden fees you weren’t initially told about.
Maintaining clear communication from the start with your bookkeeping company is the best way to avoid being caught off guard by costs. Define which services you need and get written documentation for prices and what might cause these amounts to change.
As the bookkeeper won’t be in your office, you can’t pop in and ask questions about every financial event. However, you can call them when you don’t understand something, and most provide weekly updates and monthly reports.
Look for a bookkeeper that is clear with their onboarding process. You should immediately know what role and services they will provide and the policies and procedures they use and expect for communicating, such as a schedule for when calls are accepted.
Hiring the Wrong Team
When outsourcing, there’s always a chance of not getting what you paid for; here are steps to ensure you hire the right accountant for your needs:
- Ask mentors and other business professionals for referrals.
- Vet potential candidates by checking their online reviews.
- Ask about certifications, training, and how much relevant experience they have.
By taking the time to thoroughly research individuals and firms, you can save yourself a lot of time and stress in the future.